Online shopping is a boon for retailers, but returns are not: report

NEW YORK – A huge increase in online shopping during the coronavirus pandemic has been a savior for retailers, but it comes at a price.

Buyers are expected to return twice as many items as during last year’s holiday, costing companies about $ 1.1 billion, according to Narvar Inc., a software and technology company that manages online returns for hundreds of brands.

Retailers do not want returns, but they do want shoppers who may not feel safe when going to stores to feel comfortable buying things they have not seen or experienced in person.

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People have been doing so much online shopping since March that operators like UPS and FedEx were already at full capacity before the holiday shopping season. And online sales continue to grow. From November 1 to Tuesday, they shot up 32%, to $ 171.6 billion, compared to the previous year, according to Adobe Analytics. The enormous challenges of sending COVID-19 vaccines in the coming weeks and months can put more pressure on the system.

This means that buyers who return items may not receive a refund until two weeks after they are returned to the store, said Sara Skirboll, a shopping specialist at the RetailMeNot business website.

Many companies are offering more locations where customers can deliver returns, which reduces shipping costs and obtains refunds to buyers more quickly.

Last year, Kohl’s began allowing Amazon to return all of its 1,000 stores – customers leave items for free, without the need for a box or label. This year, Amazon customers can also return items at 500 stores in the Whole Foods Market. This is in addition to Amazon’s agreement with UPS to allow similar deliveries to UPS stores.

Ticker	Safety	Last	change	Change %
KSS	KOHL’S CORP.	38.91	-0.82	-2.06%
WMT	WALMART INC.	143.50	+0.28	+ 0.20%
AMZN	AMAZON.COM INC.	3,172.69	-12.58	-0.39%

Happy Returns, a startup based in Santa Monica, California, which works with around 150 online retailers like Rothy’s and Revolve, increased its number of delivery points from more than 700 last year to 2,600. This includes 2,000 FedEx locations.

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“It is a great time to be in the returns business. There is a record every day, ”said David Sobie, CEO and co-founder of Happy Returns, noting that he processed 50% more returns in December than in November.

Walmart, the country’s largest retailer, announced earlier this week that it will pick up items shipped and sold by Walmart.com to customers’ homes free of charge through a new partnership with FedEx. The service will continue beyond the end-of-season shopping season. year.

An increasing number of retailers are asking customers not to bother to return some rejected items.

When Dick Pirozzolo wanted to return a very small shirt that he bought for $ 40 on a website called Online Cycling Gear, he was pleasantly surprised by the response. The website told him to keep it, discard it or donate it to a friend or charity – and he will send the right size for an extra $ 10.

“I was fine with that,” said the 77-year-old cycling enthusiast from Wellesley, Massachusetts. “I did a good thing for a friend and bought a new shirt.” The experience, he says, has given him the confidence to buy more online this holiday season.

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David Bassuk, global co-leader of AlixPartners’ retail practice, says stores are making it easier and easier for customers to feel less guilty when returning items.

“If they are not sure of the size, they order both sizes,” he says. “If they are not sure which color, they order both colors. And if they’re not sure which item, they order it all. But it is expensive for retailers, and they are not well positioned to handle all costs ”.

On average, people return 25% of the items they buy online, compared to just 8% of what they buy in stores, according to Forrester Research online analyst, Sucharita Mulpuru. For clothes it is even higher, about 30%.

But not all rejected items are equal and have varying levels of depreciation, experts say. After an item is returned to the retailer, the company must assess its condition and decide whether to resell it, send it to a liquidator or to the landfill.

Optoro, a return logistics company, estimates that the value of fashion clothing depreciates by 20% to 50% over a period of eight to 16 weeks. That is why it is so important to put rejected items back and go on sale quickly.

Returns are also tricky this year because retailers have pressured people to buy Christmas gifts in advance to avoid delays in shipments and crowded stores, meaning that the return window may be closed at Christmas time.

Amazon is allowing customers to return items by January 31 for items shipped between October 1 and December 31, giving customers more time to decide. Last year, the policy did not include items shipped in October.

Rachel Sakelaris, 25, from Newport Beach, California, bought her boyfriend a waterproof backpack on Black Friday, then realized that there was a 30-day return policy. She decided to change the gift exchange for the past weekend so that he had time to come back if he didn’t like it.

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Sarah Huffman, 40, from Chesapeake, Virginia, wanted to start the holiday season and spent $ 600 on Amazon on gifts, including a pair of $ 60 pajamas and a $ 90 Xbox game for her five children, in May.

But then her husband, a veteran with a disability, quit his job because he thought his boss was too negligent with the COVD-19 security protocols. Now her family is struggling to put food on the table, and she is unable to return some of the gifts she has bought because the return window has expired.

“I was trying to take the stress out of the pandemic by buying early,” she said. “I didn’t know that basic life choices would find a new low point.”